Ken Deen's THE AGGRESSIVE TRADER(tm) "Seeking double-digit profits in one to four months" BUY ALERT P.O. Box 4791 Vol. 1, No. 101 Santa Barbara, CA 93140 November 5, 1992 (805) 565-2039 10:00am New York Time CompuServe: 72020,2050 Stock+Options Account (editor's personal account): * Today I bought 200 American Colloid Co. (NASDAQ: ACOL) at 23 1/2. Stock-Only Account (editor's personal account): * Today I bought 100 Justin Industries Inc. (NASDAQ: JSTN) at 31. DESI(tm) Account (a computer-simulated hypothetical account): No trades DESI(tm) Buy/Sell Signals (computer-generated): None Justin Industries Inc. I am adding to my already heavy stake in Justin Industries. See Vol.1 #95 for a profile of this stock. Justin is my favorite stock at this time. American Colloid Co. American Colloid was a DESI(tm) buy candidate a couple of weeks ago. It was not a DESI(tm) buy only because of a red light from the market barometer. I am buying anyway because this stock looks very strong. I have been waiting for a dip in the stock price, but so far the wait has been in vain. Yesterday, the stock set a new all-time high. One of the most bullish arguments for this stock is the explosion in volume over the past three weeks, which can be seen in the chart below. The company reported third-quarter earnings two weeks ago of 51 cents a share, up 168% from 19 cents a year ago. The market reaction has been phenomenal: the stock soared from 16 3/4 on Oct. 14 to 22 1/2 on Oct. 23. Virtually all of this market reaction occurred in the days preceding the earnings news. There must have been a news leak. This is not uncommon. The same thing happened with United Wisconsin Services, for example. Even though I missed out on United Wisconsin's initial dramatic rally, I still fared very well. In spite of the recent runup in price, the stock remains modestly valued at 20 times earnings. This latest earnings report represents an acceleration in the earnings growth rate and is the 7th consecutive quarter of 40% or better earnings growth. Here are the last four earnings reports; this latest barn-burner of a quarter is the first line: Quarter Ended Sales($mil) Earnings-per-share ------ ----------------- ------------------ Sep 30 49.0 vs 38.6 +27% 0.51 vs 0.19 +168% Jun 30 43.5 vs 36.2 +20% 0.26 vs 0.18 +44% Mar 31 39.6 vs 34.1 +16% 0.16 vs 0.11 +45% Dec 31 39.9 vs 35.4 +13% 0.28 vs 0.17 +65% The stock has a 5-year earnings-per-share growth ranking of 92 (on a scale of 1 to 99) according to Investor's Business Daily. Its relative strength ranking is 96. American Colloid is engaged in mining and processing of Bentonite (a soft waxy clay) for use in various industries including metalcasting, well drilling, construction and agriculture. The company also operates a flatbed carrier transportation company and produces super-absorbent polymers for consumer markets including diapers and incontinence products. ---------------------------------------------------------------------------- *** To all who download this newsletter *** I invite you to send me your CompuServe ID to receive these alerts by e-mail. You will get them faster. I do not charge for this service. In addition, I invite you to send me your paper mail address. I will then send you a paper mailing once a month. This is the only way to receive the monthly status reports, which are chock-full of informative charts, graphs, and tables. I pay the postage. The monthly paper mailings also include hardcopy with stock charts of these buy/sell alerts. -Ken Deen ---------------------------------------------------------------------------- This issue of The Aggressive Trader(tm) may be copied and distributed freely. Please pass it around! The Aggressive Trader is edited and published at irregular intervals, but at least monthly, by Kenneth L. Deen ("Ken Deen"), P.O. Box 4791, Santa Barbara, California 93140, (805) 565-2039. Ken Deen, his employees, affiliates, and/or clients may have positions in securities recommended herein and may make additional purchases and/or sales in these securities. Recommendations made in this publication involve a high degree of risk and may result in losses. Readers should not assume that recommendations will be profitable or will equal past performance. The information in this publication is collected from sources believed to be reliable, but neither the accuracy nor the completeness of this information is guaranteed. The Aggressive Trader, Deen Earnings Surprise Index, DESI, and DESI-3 are all trademarks of Kenneth L. Deen. Copyright (c) 1992 Kenneth L. Deen. -END-